Having built a fortune on a lucrative Xtandi partnering deal, Astellas is scouting for a new round of assets to deliver growth in its next chapter. The Japanese drugmaker is joining the likes of larger companies such as Gilead, Johnson & Johnson and Sanofi in biopharma’s active M&A arena.
Astellas is scouting for buys in immuno-oncology, Bloomberg reported, and has identified muscular diseases and ophthalmology as potential expansion areas. It’s also working to refocus and sell assets that aren’t central to its plans.
Facing a 2019 patent cliff, Astellas has about $3.6 billion in cash to help finance one or more acquisitions, the news service reported. Hatanaka wasn’t specific about the size of any potential deals or what might be a target. That is pretty small potatoes compared to the likes of Pfizer or Gilead which could spend in the tens of billions of dollars, but still it heats up the race at the lower end.
Hatanaka did tell Bloomberg the company plans to invest the majority of its funds in therapeutic areas in which it’s already operating. Astellas is counting on its ability to sustain Xtandi’s growth trend, he added.
In recent years, Astellas has benefited heavily from a 2009 agreement with Medivation on the prostate cancer med Xtandi. Xtandi has grown into a blockbuster with annual sales north of $2 billion.
Pfizer recently bought Medivation for $14 billion, but the parties don’t expect that partnership to change, according to the news service.
To broaden its pipeline, Astellas in October spent $461 million up front on cancer player Ganymed, with the potential for another $940 million in milestones for IMAB362. That candidate has posted positive phase 2b data in gastroesophageal cancer and is in preclinical testing for other solid tumors. At the time, CEO Yoshihiko Hatanaka said the deal would bring “the potential to establish a new pillar following Xtandi.”
In recent quarterly calls, companies including Gilead and Sanofi have said they’re eyeing M&A action. Late last week, Johnson & Johnson confirmed it’s in talks with Actelion—the drug giant reportedly has offered more than $26 billion, according to Bloomberg.
Even though the industry overall has seen slow M&A this year, analysts have said that activity might pick back up with Donald Trump’s election.